Shenzhen’s 2018 gross domestic product surpassed that of Hong Kong, calculated by the annual average exchange rate, for the first time in history.

Shenzhen’s 2018 gross domestic product surpassed that of Hong Kong, calculated by the annual average exchange rate, for the first time in history, as the latter unveiled the government’s 2019-20 budget on Wednesday.

Hong Kong’s GDP grew 3 percent in 2018 to HK$ 2.845 trillion ($362.4 billion), equivalent to 2.4 trillion yuan based on the average annual exchange rate, according to the government’s Census and Statistics Department.

Meanwhile, its neighboring city and China’s “Silicon Valley” Shenzhen earlier this year announced a year-on-year increase of 7.5 percent in GDP－2.422 trillion yuan in total.

Therefore, Hong Kong was behind by about 22 billion yuan and Shenzhen also ascended to the top spot in GDP in the Guangdong-Hong Kong-Macao Greater Bay Area.

Shenzhen’s 2017 GDP already outperformed Hong Kong according to the real-time exchange rate, but fell behind if calculated by the annual average exchange rate.

Converting using the average rate in the year is relatively more accurate, said Sun Bushu, deputy director of the South China City Research Association.

However, per capita GDP in Hong Kong in 2018 was HK$381,870, equal to around 322,000 yuan according to the annual average exchange rate, and remains above Shenzhen’s 200,000 yuan.

Furthermore, he estimated that Guangzhou would also catch up with Hong Kong soon.

Hong Kong’s Financial Secretary Paul Chan Mo-po said in his budget speech that the local economy was expanding with a stronger growth momentum during the first half of 2018, but had slowed down in the second half due to brewing trade tensions and other unfavorable conditions.

For the fourth quarter, the growth rate was a mere 1.3 percent, making it the slowest pace since the first quarter of 2016.